Incremental innovations (small, safe changes to your firm’s offerings) make up 85%-90% of companies’ development portfolios. But “little i” projects rarely produce competitive advantage. For that, you need “Big I” innovations–offerings new to your organization or the world. Yes, they’re risky. But avoid them, and you may strangle your company’s growth.
Professor George S. Day recommends a solution: Increase the proportion of major innovations in your portfolio while carefully managing their risks. Two tools can help:
A risk matrix enables you to estimate each project’s probability of success or failure based on how big a stretch it is for your firm. The less familiar the intended market and the product or technology, the higher the risk.
The R-W-W (“real,” “win,” “worth it”) screen helps you evaluate projects’ feasibility.
Author: George S. Day
Sources: BNET, Harvard Business Review
Subjects: Innovation, Management